Dozens of councils are planning to increase taxes in the next financial year,
despite warnings by David Cameron and Eric Pickles, the Local Government
Secretary

Millions of householders are facing council tax rises as dozens of local authorities prepare to defy the Government’s demands to freeze bills.

A survey by Telegraph found that at least 42 councils are planning to increase bills, despite warnings by ministers that they should help people struggling with rising household budgets by continuing a three-year freeze on tax rates.

The increases could lead to average council tax bills in some areas rising by more than £24 a year. Among those proposing to raise householders’ bills are North Yorkshire, Northamptonshire and Buckinghamshire county councils, all Tory-led authorities which have maintained the freeze for the past three years.

Oxfordshire council, Mr Cameron’s local authority, is planning to raise its tax bill for the second year running.

Each are preparing to turn down extra funding by the Department for Communities and Local Government (DCLG) – equivalent to a one per cent tax increase – offered in place of a tax rise.

John Weighell, the leader of North Yorkshire council, said capping bills and settling for the additional funding for another year could place the council’s finances in a perilous position. It is now planning to raise its share of tax by two per cent – equivalent to £21 a year for the average household.

“In return for the tax freeze, the council has received a grant from the Government equivalent to a one per cent rise. A similar offer is being made for the next two years. However, we have reached the point where accepting that offer presents us with a financial challenge which we believe may be unacceptable.”

Councils planning to raise their tax bills say they can no longer afford a freeze, citing concerns about cuts to funding from Whitehall and the rising cost of services such as elderly care.

The Telegraph surveyed all of England’s 353 councils about their planned council tax rates for the next financial year beginning in April, receiving responses from 186.

More than a fifth of local authorities said they were preparing to increase council tax rates and a further 73 said they had yet to decide on proposals to be voted on by councillors.

Local authorities must hold a referendum if they increase council tax by more than two per cent, while smaller councils can increase their bills by up to £5 per year before having to ask the public – although the limits for the next financial year have yet to be set.

The vast majority of the councils planning an increase are intending to avoid having to hold a referendum by staying beneath these limits.

Sixty-eight councils said they intended to cap their tax rates. A further three authorities said they intended to reduce tax for households in their areas: the London Borough of Barnet, Tendring district council and Brentwood borough council, which is in the constituency of Eric Pickles, the Local Government Secretary.

In some areas households could see multiple increases on their tax bill as several tiers of local authorities increase rates in the same area. For example, Selby district council, which collects tax from households on behalf of all local authorities covering the area, is proposing to raise its own share of the levy by two per cent, amounting to £3.18 on the average bill. As North Yorkshire council is also intending to increase its share of the bill, households in Selby face a rise of almost £25.

Many councils saw the offer as a short-term measure because it would end after two years, whereas increasing tax would raise the council’s annual income ­indefinitely. However, DCLG has now said that the current year’s grants will continue to be paid in future years.

Brandon Lewis, a local government minister, said: “Under this government, thanks to the freeze, council tax bills have fallen by 10 per cent in real terms. Additional funding is on offer for this and for councils to freeze council tax again next year.”

According to the Local Government Association, councils need to find £10 billion in savings over the next two years on top of £10 billion already cut from budgets under the Government’s austerity programme.